Notes from Shoreline City Council meeting Nov 5

Thursday, November 8, 2018

Mayor Will Hall reads proclamation for Veterans' Day
The proclamation was accepted by veterans from the Shoreline
Veterans Association and American Legion Post 227
Photo by Jerry Pickard

Shoreline City Council Meeting 11/05/2018
By Pam Cross

Mayor Will Hall called the meeting to order at 7:00pm.

The Mayor proclaimed November 11, 2018 as Veterans' Appreciation Day with a presentation to Major General Raymond Coffey, Chair of the Shoreline Veterans Association, and Larry Fischer, Commander of the Shoreline American Legion, among other guests.

Presentation of City Manager Debbie Tarry
  • Over 150 children attended the Annual Indoor Playground Halloween at Spartan Recreation Center. All of the children and many of their parents were dressed in costumes.
  • Arbor Day Annual Event was held Nov 3rd at Darnell Park. Volunteers assisted Earth Corps in removing weeds, maintaining areas and planting trees.
  • Veteran’s Day Annual Celebration is Nov 12th at noon in the City Hall lobby. There will be a short program followed by coffee and tea with light snacks.
  • The Holiday Crafts Market is Nov 17th from 9:00am to 4:00pm at the Spartan Recreation Center
  • The Shoreline Social Justice Book Club will meet Sunday Nov 18th from 2:00 to 4:00pm at City Hall Council Chamber. The November book choice is All the Real Indians Died Off by Roxanne Dunbar-Ortiz.
  • There will be Park Volunteer Work Parties to restore and improve Shoreline parks Saturdays and Sundays through December. Check the City’s web calendar for times and locations.
  • Veteran’s Day is Monday Nov 12th. Shoreline City Hall will be closed on Monday Nov 12th and there will be no Council Meeting. Shoreline Pool will be closed on Sunday Nov 11th. Spartan Recreation Center will operate on Regular Schedule.
  • The Parks Funding Advisory Committee will meet Nov 14th at 7:00pm in the Council Chamber.
  • The Planning Commission meeting for Nov 15th has been cancelled.

Council Reports 

Councilmembers McGlashan and McConnell attended the Seashore Transportation Forum. There was a Presentation on their RapidRide bus Lines. The E-line travels to Shoreline along Aurora. About half a dozen are planned for expansion.

Public Comments

Dr. Bruce Amundson commented on the underfunding of Public Art in Shoreline. A public arts sculpture that is all but ready to be installed at the Commons on Aurora has been permanently placed on hold due to inadequate funding by the City. After more that 100 proposals were reviewed, over a period of 7 months by a volunteer group, selection was made and work was begun. Since the initial deposit was made several years ago, it is still not being funded for completion and installation even in the 2019 budget. That money remains in the bank. A request for $50k in additional funding is requested for consideration by Council to finally finish this project.

Nancy Morris began to speak regarding candidates whereupon she was reminded by Mayor Hall that Council rules prohibit speaking about candidates or ballot measures at any Council meeting.

Nathan Wayne commented the sidewalks by 175th and Meridian need attention and requested the City to make a study of this area.

The Agenda and the Consent Calendar were approved unanimously.

Action Items

Mayor Hall stated the agenda for the Action Items will begin with a Staff Report followed by Public Comment. Public comments by email or previously stated during this meeting are noted.
Council Comments will follow later under Study Items.

The Biennium Budget is available on line at the City website. Budget Books are also available for review at both libraries (Shoreline Library and Richmond Beach Library) as well as at City Hall.
Budget books are available on CD for purchase at City Hall.

The remaining schedule for the remaining Budget and CIP Review:
  • November 19, 2018:
    • Public hearing and discussing the Proposed Budget and CIP
    • Adopting the 2019-Property Tax Levy,
    • Adopting the 2019-2020 Biennium Budget and the 2019-2024 CIP
8(a) Public Hearing on Ordinance No. 842 - 2019 - 2020 Property Tax and Revenue Sources.
Sara Lane, Administrative Services Director, gave a overview of revenue sources. The largest sources of Operating Revenue are Property Tax (30%), Sales Tax (21%) and Franchise fees/Contract Fees/Utility Tax (21%).

Some other sources are restricted in use. For example, fuel tax is collected by the state and shared with cities on a per capita basis. Its use is restricted to funding our streets.

There was no public testimony.

8(b) Public Hearing on Ordinance No. 841 - Proposed 2019 - 2020 Biennium Budget and the 2019 - 2020 Capital Improvement Plan
Rick Kirkwood, Budget Supervisor, provided a brief review of budgeted expenditures by Fund (general fund, street fund etc) and by Function (public safety, internal support services), Capital Funds (transportation, facilities & parks projects).

There was no public testimony.

8(c) Adopting Ordinance No 847 - Authorizing Acquisition of Real Property for the Purpose of Provision of Sewer Service Utility and Uses Related Thereto by Negotiated Voluntary Purchase, Under threat of Condemnation, or by Condemnation

Margaret King, City Attorney, gave the Staff Report. There is a slight change to the previous presentation that was adopted by Council on October 15, 2018. There is still a small area (650 sf) that is currently used as a driveway that the City must acquire. The purpose is to ensure access to adjacent properties. There are already several easements over this property, and part of it may actually belong to Snohomish County as a part of the county road. Proper notice has been sent to the landowner. If approved, the Council will have to waive Council Rule of Procedure 3.5 (requiring three readings of the ordinance) due to the expeditious nature of this item.

No public comment.

After minor discussion by Council clarifying the ownership and notification to the owner of the land, this ordinance was adopted unanimously.

8(d) Adopting Ordinance No 843 - Extending the Expiration Period For the Transportation Impact Fee Exemption For Certain Business Categories

Tricia Juhnke, Engineer and Nate Daum, Economic Development Manager reminded Council this is a Five Year Extension with no changes. The discussion was held October 23rd and they are now back to request adoption of the Ordinance.

Deputy Mayor Salomon made a Motion to adopt the Ordinance which was seconded. The Deputy Mayor spoke to the Motion stating that he initially wanted to exempt small businesses from the Transportation Impact Fee (TIF) because he felt the start up costs were prohibitive for small business. Council was unable find a way to do this. The Exemption has proven to be successful and he therefore wants to move it forward. He later stated Shoreline is clearly not competitive with Lynnwood and Seattle in spite of economic development being the number one goal of Shoreline for the last several years.

Councilmember Chang asked for clarification how this Exemption applied to new construction, because smaller businesses would probably move into an existing building. TIF is a large fee and is prohibitive for small start-ups. Larger businesses are likely to build new. Could new construction be removed from the exemption (based on the assumption a larger business would be in a better position to pay this fee)? And if so, how would this affect Shoreline’s competitiveness with surrounding cities in attracting new business? She thinks we are leaving money on the table. Later she stated the TIF is really large and she doesn’t want to discourage new business, but there are larger projects coming in next year and she’s concerned with the TIFs we are losing there.

Councilmember Scully understands that Staff may not have the ability to provide an accurate answer to Councilmember Chang. But given there are a number of empty commercial buildings and lots, he is willing to forego the TIF we’re losing by exempting the larger businesses in order to attract new business (large or small) to Shoreline. It should be noted that Shoreline does not have a lot of commercial space in general, so although the vacancy rate may be low, there is limited space available.

Mayor Hall prefers to discontinue the Exemption. He doesn’t want to discourage new business, but feels since we have a chronically underfunded transportation system, this could provide an additional $200,000 per the Staff report.

Councilmember Roberts supports the Exemption wholeheartedly. A company going into an existing building would not be paying the TIF, unless it’s a change of use.

Councilmember McGlashan asked if a new building replaces an old building that had the same use (replace a restaurant with a restaurant) do you pay TIF? If the occupancy is the same no, but if it’s determined to be different, you would pay the difference in the TIF rates. The TIF is a definite roadblock to a new business that is looking at every dollar in starting up.
Staff does an annual review for Transportation, so Council can review annually to examine its effectiveness and to see how much money we are foregoing.

Councilmember McConnell believes an annual reminder should be set so as Council changes, it will still come up for review. We are between Seattle and Lynnwood, both “buzzing” with retail and somehow Shoreline is overlooked. She supports the Exemption.

The Motion passed in a vote of 5 to 2, with Mayor Hall and Councilmember Change opposed.

Study Items

9(a) Discussing Ordinance No. 842 - 2019-2020 Property Tax and Revenue Sources
9(b) Discussing Ordinance No. 841 - Proposed 2019 -2020 Biennium Budget and the 2019-2020 CIP
9(c) Discussing Ordinance No. 846 - Final 2018 Budget Amendment

Staff report Sara Lane and Rick Kirkwood reintroduced the topics.

Councilmember Roberts noted we have a large Reserve, about twice what is required. Staff commented that bond rating agencies look favorably on high Reserves, but we don’t want it to be too high in order to remain fiscally healthy yet socially responsible. Roberts stated maybe it’s time to discuss the maximum we want in reserve and the policy for using it. We are asking for fee schedule increases and keep asking for more, shouldn’t we discuss this large Reserve? We could spend some of this on the Arts or some pedestrian safety road shoulder painting. If we are spending between one-time 20k and 40k, why not use some of that reserve? Later Roberts pointed out that the Reserve is part of the budget and this is an appropriate time to discuss amending it.

Councilmembers agreed that if we start spending from the Reserve, it should be part of an established plan in order to prevent getting into discussions of “pet projects.” Capital expenditures are decided with the help of citizens committees and Staff.

Deputy Mayor Salomon likes the high reserves keeping in mind the economy’s ups and downs. When the economy weakens, we will need more money to even out the lack of revenue in order to pay staff and also or increased need for social services as people lose jobs.

Councilmember Scully said that King County, after years of study, has a 90 day Reserve. That is, they have enough money to fund any program for 90 days without any incoming revenue. He agrees we need a number for “high” reserves. On the other hand, it’s important during good economic times not to erode our reserves.

Above slide from presentation to Council/pac

From Page 422 of the Proposed 2019-2020 Biennial Budget/pac

General Fund Operating Reserves
  • The City shall maintain a General Fund Operating Reserve to provide for adequate cash flow, budget contingencies, and insurance reserves. The General Fund Operating Reserves will be determined as follows: 
    1. Cash Flow Reserve: The City shall maintain a cash flow reserve within the General Fund in an amount equal to $3,000,000. This is approximately equal to 1.5 months of operating expenditures. The City will review biennially the required cash flow reserve level that is necessary to meet the City’s cash flow needs. If it is determined than $3,000,000 is not adequate, the Finance Director shall propose an amendment to these policies.
    2. Budget Contingency: The City shall maintain a budget contingency reserve within the General Fund equal to 2% of budgeted operating revenues.
    3. Insurance Deductible Reserve: The City shall maintain an insurance reserve within the General Fund to be used for potential substantial events that cause damage to the City’s fixed assets and/or infrastructure. 

Councilmember McConnell believe we should be fiscally conservative. What kind of reserve is needed for a good bond rating? Are we close?

Councilmember Chang is happy to have the discussion about what the Reserve should be.

Councilmember McGlashan agreed the conversation needs to be had, but perhaps not in this budget cycle.

Mayor Hall pointed out Reserves are not only for liquidity or cash flow reserves, but it is also a way to save for new projects or deferred projects, such as the Public Works planned utility yard. In terms of bond rating, while we have a good bond rating it could be higher. A higher rating will save taxpayers a lot of money. This important right now due to the pending Sidewalks Project and the Pool and Recreation Center Plans.

Mayor Hall discussed his proposed Amendment to the 2019-2020 Budget which involved approximately $5,000 funding for the Economic Development Project and the start up of the Greater Seattle Partners (GSP) Economic Development Initiative. While providing an initial contribution, the Mayor is disappointed in the direction they appear to be taking. He said they seem focused on attracting large corporations to locate in Seattle from overseas and other locations, and to create a lot of jobs. But this will also bring in people from other states (CA,CO,AZ) to fill those jobs because we don’t graduate enough people in these classes. This kind of growth is driving our challenges in housing, transportation and environment. He prefers to focus on education to get our youth into these higher paying jobs, growing local businesses here, and creating a sense of place instead of the city between Seattle and Lynnwood. So he suggests removing it from the budget.

Councilmember McGlashan agrees with the Mayor, however he thinks people will be moving to Shoreline and some of those people may start their own businesses. So there is some benefit to the City.

Councilmember Scully is not interested in providing the housing for large businesses located in Seattle. He doesn’t feel they are bringing any business to Shoreline. He supports removing it.

Councilmember Roberts mentioned that when corporate headquarters moves to a location, ancillary services grow. It is nice to have a seat at the table, to be able to say “how are you helping us”, and work with other cities with similar philosophies. Mayor Hall said that was his initial belief, however it hasn’t worked out that way. It is difficult to even get their attention. Maybe pulling out will. Roberts pointed out the new executive director has only held the position for a couple of months and it is a new organization.

Councilmember Chang asked what they have been doing so far. The Mayor responded that they have been largely building their own organization. But the materials they’ve developed appear to be large organizations focused on key markets sector strategy.

Mayor Hall stated that from an economic development perspective we have had a great 10 years. Since the Recession ended in 2009, this has been the the second largest period of economic expansion in the history of the USA and if we get to June without another recession, it will be the longest period of economic expansion in the history of the USA. Unemployment is at 3.7% for 2 months- the lowest in 50 years. But we’re still talking about exempting new businesses from the TIF. We need to get this success felt in Shoreline

Councilmember would like a brief Staff presentation.The Mayor agrees and so it was referred to staff. All amendments need to be to staff by 11/7.

Item 9c, to increase appropriation by the City to major maintenance fund. this was part of the 2018 budget. It was agreed to move it to the Consent Calendar.

Meeting adjourned.


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